Best Credit Cards for Groceries in Canada
What You Should Know
- Credit cards in Canada offer up to 6% back in rewards on grocery shopping.
- Some stores that sell groceries may not be categorized as grocery stores by credit card networks.
- You can determine if a store is categorized as a grocery store through its assigned merchant code.
- Some credit cards may offer rewards only at select grocery store chains.
Grocery purchases take up a large part of monthly expenses for an average person. Credit cards that offer rewards on grocery shopping can greatly benefit their owner. Best credit cards for grocery shopping in Canada offer up to 5% cashback or 5x points on grocery purchases. On the other hand, some credit cards may not recognize some grocery stores.
A credit card for grocery shopping can help you save a significant amount of money, but you should know how to use your card to your advantage. Different credit cards may not recognize some stores as grocery stores, and some cards may not be accepted in some stores. For example, American Express Cobalt offers 5x membership points for every dollar spent in grocery stores, but it cannot be used in Costco or in Loblaws Supermarket. You should make sure that you pay with your credit card in the grocery stores that are recognized by your credit card.
Some credit cards may also have a cap on the amount of cashback or bonus points you can receive from grocery purchases. For example, BMO Cashback Mastercard offers 3% cashback on eligible grocery stores but only for up to $500 in monthly spending. Understanding the limitations of your credit card can help you maximize the rewards you get from the card.
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Cash Back Vs Reward Points
Cash Back: Cash back rewards are straightforward. If the cash back rate for a card is 4% on groceries, you earn 4% cash back on every purchase that qualifies as a grocery purchase. The cash back rewards are accumulated in your account which can be redeemed to pay off your credit. Some cards may have a minimum redemption, for example, you may require to have a minimum of $10 cash back reward balance to be able to redeem it.
Reward Points: Reward points on the other hand are not as straightforward. The redemption value of reward points usually varies depending on where you redeem them. For example, Scotia Scene+ points can be redeemed at a 1 cent per point (CPP) value for Cineplex movie tickets and partner groceries, however; if you wish to redeem the points for statement credits, you will get a value of 0.7 cents per point.
Hacks for Earning Maximum Points
Gift Cards
Grocery is a very competitive category when it comes to credit card rewards with most credit cards offering bonus rewards on shopping at grocery stores. One hack to maximize your reward points is to purchase gift cards for stores that don’t fall under the grocery category (such as Home Depot) at a grocery store. This way, you could earn more points on your non grocery purchases as well.
However, you would not get the purchase protection and extended warranty if you use this hack, which some credit cards offer when you use them for your purchases.
Order Online via Instacart
If you want to use your AMEX to buy groceries from a store that does not accept AMEX such as Loblaws or Costco, you could use the online grocery delivery service Instacart and pay using your AMEX.
What’s more is that since Instacart is categorized under grocery by credit card networks, you could earn bonus points for grocery shopping that you otherwise won’t while shopping in-store at Costco and some Walmart stores that don’t fall under the grocery category. However, you should note that some stores may offer a different price on the products and not all products may be available online.
Bottom Line
There is no one size fits all when it comes to credit cards for grocery. Some credit cards that offer great rewards on groceries may not be accepted at your local grocery store or your grocery may not qualify as a grocery as per the credit card network guidelines. A store that offers the best benefits, such as Costco, may not qualify as a grocery at all.
Another consideration should be the credit card fees. Most credit cards that offer good rewards on groceries come with an annual fee and to get the best value of these cards, your grocery expenditure should be enough to justify the fees you pay. If your grocery expenditure is very low and you mostly rely on eating out or food deliveries, you may be better off spending on a card that offers better benefits on dining and food delivery rather than on groceries. Therefore, it is best to assess your individual situation and pick a card that may be best for you.
Frequently Asked Questions
Is Walmart Considered a Grocery Store for Credit Cards?
Unfortunately, not all Walmart stores are considered as grocery stores by credit card networks. While VISA and AMEX don’t categorize Walmart as groceries at all, Mastercard has categorized only Walmart Supercentres as grocery stores. If you shop for your groceries at Walmart Supercentres, you could use a mastercard such as BMO Cash Back World Elite Mastercard to earn maximum value. You could also check the National Bank World Elite Mastercard.
For all other Walmart Stores, you could use a card such as the American Express SimplyCash Preferred card that offers 2% cash back on all purchases, or the Walmart Rewards World Mastercard that offers 3% and 1.25% Walmart reward dollars on shopping online at Walmart.ca and in-store respectively.
Is Costco Considered a Grocery Store for Credit Cards?
Similar to Walmart, Costco stores are also not categorized as a grocery store by credit card networks. Instead, Costco is categorized as a discount merchant and you will earn only the base cash back or reward points rate at Costco. To maximize rewards at Costco, you could get a credit card that offers a good base rewards rate such as the Rogers World Elite Mastercard that offers 1.5% cash back on all purchases.
What Credit Cards Does Costco Canada Accept?
Costco accepts only Mastercard credit cards for payments, apart from cash and debit cards. Costco does not accept Visa and Amex Credit cards. Considering that Costco is not categorized as a grocery store by credit card networks, you could use a mastercard that offers a high base reward rate to earn maximum rewards at Costco.
Does No Frills Accept Visa?
No Frills now accepts both Visa and Mastercard Credit Cards. However, they do not accept AMEX credit cards at this time. It is also noteworthy that No Frills does not accept Mastercard Debit at this time.
What Grocery Stores Accept AMEX in Canada?
Amex cards such as the Scotia Gold Amex and American Express Cobalt offer great rewards on groceries. However, some stores do not accept AMEX for your purchases such as the Loblaws Companies stores. Some of the major Canadian groceries that accept AMEX are: Sobeys, Longo’s, IGA, FreshCo, Rabba, Metro, Farm Boy, Foodland, Safeway, Pusateri’s, 88 Supermarket and Whole Foods. You could also use AMEX to purchase groceries through Instacart.